Publish Date: May 24, 2023
Author: Seubert
Tags: Blog - SeubertU

Workers’ Comp Issues

Workers’ compensation is an important safety net for employees who are injured or become ill through the course of their employment.  However, recent trends suggest that the system is under strain due to a range of factors, including an aging workforce, falling safety standards, and a decrease in the number of new entrants to the workforce. 

One significant trend in the labor market is the aging of the workforce. As people live longer and stay healthier later in life, many are choosing to remain in the workforce longer, while some are left with little choice but to stay as a result of economic issues.  This can lead to an increase in workers’ compensation claims and cost as age-related injuries such as back pain, arthritis, and vision impairment can increase risk factors for aging workers.  Further compounding the problem is the often impossible task of rehabilitating them back to their pre-injury state making these cases ripe for litigation.  The reality of the issue is that we have workers working longer than ever and the cumulative effect of the wear and tear on their bodies is coming to call.  As many have said before, we have a significant worker shortage and our faithful, dedicated front line workers who continue to hang in there are bearing the brunt with their bodies, and employers balance sheets are soon to follow. 

Another prevalent trend affecting nearly every industry is the decrease in the number of new entrants to the workforce. The labor force participation rate, or the percentage of working-age adults who have a job is on the rise, but still far below pre-pandemic levels.  With fewer young people entering the workforce, there is a shortage of skilled workers in many industries. This can lead to increased workloads and stress, which will contribute to an increase in workplace injuries and illnesses. Conducting a risk assessment to identify highly repetitive tasks and those that involve high exertion are major opportunities to reduce the risk of injury. Process automation is not just for the Jetson’s anymore, it is more cost effective than you think and could quite possibly keep your valuable human capital solving problems and responding to customers versus literally breaking their back. 

At the same time, safety standards in many industries are falling. As companies cut costs and reduce training budgets, workers may not receive the necessary training and retraining on safety procedures. Employers are often faced with a choice; try to run their operations with a reduced workforce and do their best to establish baseline compliance with injury prevention standards or actively identify risk factors and continuously communicate, train, and mitigate those risks to keep your valuable employees healthy, safe, and in your employ.  While workers compensation rates have historically been on the decline, now is not the time to take your foot of the gas, injury and incident prevention will pay dividends through culture, labor retention, and reduced operating costs. Employers who invest in injury prevention can expect a conservative return on their investment of $6 for every $1 spent. 

Finally, the number of workplace fatalities has increased in recent years. This may be due in part to the aging workforce, a period of reduced enforcement activities, or falling safety standards. However, it can also be attributed to an increase in workplace violence and accidents. Time spent on providing mental health resources, developing an incident response plan, conducting security assessments, and educating supervisors on identifying concerns and deescalating situations will pay dividends, even with your workers compensation experience. 

In conclusion, the workers’ compensation system is facing a variety of challenges in the current labor market. To ensure that workers are protected, and employers avoid preventable losses, capitalize on the resources that are provided by your insurance carriers and invest in risk assessment exercises to drill down into how your employees will get hurt, and the ways you can prevent those injuries from ever happening. Culture has a tremendous impact on injury prevention and in a recent report, “The State of Employee Safety” one of the key findings suggest that there is a growing disconnect in safety perception.  An important takeaway from the survey was that a majority of respondents, 80% said that they believe their safety at work is “more important than ever,” but only 54% said that they believed their safety was extremely important to their employer. What will you do today to improve this perception in your workplace?